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CS Professional · Compliance Management, Audit and Due Diligence · Secretarial Audit

The secretarial auditor of Narmada Cement Ltd, a listed company, has made an observation that two Board meetings were held without proper notice. How must the Board deal with this in its report under section 204(3)?

The Board must explain in full, in its report under section 134(3), any qualification, observation or other remark made by the secretarial auditor, as section 204(3) requires. The duty covers observations too, not merely formal qualifications.

  1. AIgnore it, since observations are advisory
  2. BExplain in full the qualification, observation or other remark in the Board's reportCorrect
  3. COnly disclose it if the observation amounts to a qualification
  4. DRefer it to the company secretary under section 205 for private action

Explanation

Section 204(3) requires the Board, in its report under section 134(3), to explain in full any qualification or observation or other remarks made by the company secretary in practice. The duty is not limited to formal qualifications.

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